Kate Gee and Oliver Steeple examine the recent decision in Federal Government of Nigeria & Anor v Williams in The Law Society Gazette

The court must strike a delicate balance between the principles of finality of litigation and abuse of process, illustrated by the recent decision in Federal Government of Nigeria & Anor v Williams [2025] EWHC 1096 (Comm).  The case explores substantive legal principles governing set aside for fraud, even where the alleged fraud could have been discovered earlier.

The decision is a powerful reminder that, while the English courts are vigilant against abusive or vexatious litigation, they will not allow the finality of judgments to become a cloak for fraud. Parties must be proactive, diligent, and sceptical in their approach to litigation, and should be prepared to act swiftly and decisively when faced with questionable claims or evidence. The courts’ willingness to set aside judgments for fraud, even where earlier opportunities to do so were missed, is both a safeguard against injustice and a warning.

Background

• The case stems from an undercover operation in Nigeria in 1986 into foreign exchange control breaches, which led to a criminal conviction against Dr Williams. Dr Williams was subsequently pardoned and claimed to have lost substantial sums.
• Dr Williams brought and discontinued proceedings against the Central Bank of Nigeria (“CBN“). The CBN contended certain key documents Dr Williams relied on were forgeries and that his claim was fraudulent. Dr Williams discontinued against the CBN three days before trial in 2016.
• Days later, Dr Williams commenced proceedings against the Federal Government of Nigeria (“Nigeria“) and its Attorney General (“AG“), based on the same underlying factual allegations. In 2018, he obtained a default judgment for USUSD 15 million (the “Default Judgment“).
• In September 2020, Nigeria and the AG unsuccessfully applied to set aside the Default Judgment on the on the grounds of service and state immunity.
• In the present proceedings, Nigeria and the AG have applied to set aside the Default Judgment on the on the basis that it was obtained fraudulently, alleging that Dr Williams knowingly made false representations and relied on fabricated documents.
• This decision concerns Dr Williams’ application to strike out Nigeria and the AG’s claim, asserting that the claim was a collateral attack on previous judgments, that the FGN and AGs’ allegations of fraud were known in 2012 and are abusive and vexatious.
• Henshaw J dismissed the application, concluding that Nigeria and the AG’s “case is, on the face of it, a strong one. All in all, the Claimants’ pursuit of the present claim is, on any approach, not an abuse” and should be allowed to continue.

Set Aside

CPR 13 governs set aside and variation of default judgments. Default judgments must be set aside if they are wrongly entered, even if there is no defence on the merits. Otherwise, the court may in its discretion set aside a default judgment if the defendant has a real prospect of successfully defending the claim or it appears to the court that there is some other good reason why: (i) the judgment should be set aside or varied; or (ii) the defendant should be allowed to defend the claim.

Set Aside for Fraud

To set aside a judgment (including a default judgment) obtained because of fraud by the other party, fresh proceedings can be brought before the court that made the judgment. The party who seeks to set aside the judgment must establish that both they and the court were deceived by the party in whose favour judgment was entered. Further, as an application for default judgment is administered by the court without the opportunity to examine and test the representations made in the particulars of claim at trial, it is essential that those representations, which are fortified by the statement of truth, are in fact true. This was emphasised by Andrews LJ in her judgment in Park v CNH Industrial Capital Europe Ltd (t/a CNH Capital) [2021] EWCA Civ 1766.

The English Courts have traditionally been reluctant to permit re-litigation of adjudicated matters. Res judicata, cause of action estoppel, issue estoppel, and the rule in Henderson v Henderson (1843) 3 Hare 100 (i.e., that parties must normally advance the totality of their case on the first bout of litigation) all serve to prevent parties from subsequently raising matters which were or could have been raised in earlier litigation. The public interest in finality is strong: parties should not be vexed twice in the same matter and the courts’ resources should not be consumed by repetitive litigation. However, these principles are not absolute, and exceptions exist –notably in cases of fraud.

The leading modern authority is Takhar v Gracefield Developments Ltd [2019] UKSC 13, in which the Supreme Court clarified the approach to applications to set aside judgments for fraud. The key points are:

·       Fraud Unravels All: If it can be shown that a judgment was obtained by fraud, the court will generally set it aside, even if the fraud could have been discovered with reasonable diligence before the original judgment. The rationale is that the law does not expect parties to conduct themselves on the assumption that their opponents are dishonest.

·       No Reasonable Diligence Requirement (in most cases): The majority in Takhar held that, where no allegation of fraud was raised at the original trial, there is no requirement for the applicant to show that the fraud could not have been discovered earlier with reasonable diligence. The only exceptions are where: (i) fraud was actually alleged at the original trial and new evidence is now relied upon; or (ii) there was a deliberate decision not to investigate a suspected fraud.

·       Materiality and Causation: The fraud must be “material”, i.e. the dishonest evidence or conduct must have been an operative cause of the judgment being obtained (see also Royal Bank of Scotland plc v Highland Financial Partners LP [2013] 1 CLC 596).

·       Abuse of Process: While the right to set aside for fraud is robust, the court retains a residual power to prevent abuse. As Lord Briggs (in the minority) noted in Takhar, the court may consider a range of factors (including the gravity of the fraud, the seriousness of any lack of diligence, and the impact on finality), but the threshold for barring a fraud claim as abusive is high.

In determining Dr Williams’ application, Henshaw J applied these principles, finding that the Claimants had – reasonably – relied on external advice in determining how to frame their original case, and although neither Nigeria nor AG previously alleged fraud, they had not deliberately chosen not to do so in full knowledge of facts now known. The fact that the FGN and the AG may have been able to, with better advice or more diligence at the time, have raised the fraud earlier did not bar its claim.

Practical Lessons

(i)              Ensure Effective Processes for Receiving Service

The FGN and AG’s difficulties were compounded by failures to monitor and respond to service of proceedings. Parties should ensure that robust systems are in place to receive, acknowledge, and act upon service of legal documents, especially where proceedings may be served abroad or through diplomatic channels.

(ii)             Engage Early and Seriously

Delay, inattention, and lack of conviction, no matter the nature of the allegations made, can be fatal. The FGN and AG’s initial failure to engage with the proceedings led to Dr Williams obtaining the substantial Default Judgment and these proceedings. Early and serious engagement, including prompt appointment of appropriate legal advisers, is essential.

(iii)            Scrutiny and Scepticism

Parties should not assume that claims (or defences) are well-founded simply because they are advanced with apparent formality or supported by documentation.

(iv)           Evidence

Where document authenticity or veracity of factual assertions is in doubt, parties should investigate and obtain expert and factual evidence. In Dr Williams’s case against the CBN, expert evidence on the alleged forgeries was important.

(v)            Legal Team

The FGN and AGs’ case was hampered by changes in legal representation and a lack of continuity.  Where possible, parties should maintain the same legal team with requisite expertise throughout.

(vi)           Finality vs. Fraud

The courts are acutely aware of the need to balance the public interest in finality with the imperative to prevent injustice through fraud. The courts will not allow the finality to protect fraudsters, but the set aside threshold for fraud is high, and parties must be prepared to plead and prove their case.

(vii)          Causation

In giving default judgment, a court may be persuaded by multiple pieces of evidence only one of which is fraudulent. It is only necessary for fraud to be an operative, not sole, cause of the judgment for it to be set aside.